Central Banks

Bank of Japan monetary policy decision and statement for March 2018  

BOJ keeps monetary policy steady – as widely expected 

  • maintains short-term interest rate target at -0.1 pct
  • maintains 10-year JGB yield target around zero pct

Decision on yield curve control made by 8-1 vote, board member Kataoka dissents

BOJ removes phrase
on expected timing for hitting price goal

BOJ quarterly report:

  • Japan’s economy expected to continue expanding moderately
  • Momentum for hitting price goal sustained but lacking steam
  • Inflation likely to accelerate towards 2 pct as output gap improves, inflation expectations heighten
  • Risks to the price outlook skewed to downside
  • Risks to economy balanced for FY2018 but skewed to downside for FY2019

Core CPI expected +1.8 pct in FY2019/20 vs +1.8 pct projected in January

  •  Japan core CPI expected +1.8 pct in FY2020/21
  •  Japan core CPI expected +1.3 pct in FY2018/19 vs
    +1.4 pct projected in January

BOJ deletes mention of time frame for price target in
outlook report

Risks to economy are roughly balanced for fiscal

  • risks to economy in fiscal 2019 are to downside
  • no big change in price forecast for fiscal 2019
  • there are downside risks to prices
  • inflation expectations pose both downside and upside risks
  • consumer inflation moving around 1 pct
  • inflation expectations moving sideways
  • inflation expectations likely to heighten ahead and gradually converge towards 2 pct
  • impact of sales tax hike next year among risks to economic outlook

Kataoka says need to buy JGBs so yield for duration
of 10 years or longer falls further

  • says BOJ should clarify it will ease
    further if domestic factors delay achievement of price target

BOJ’s median real GDP forecast for fiscal 2019/20 at +0.8 pct vs +0.7 pct projected in January

  • median real gdp forecast for fiscal 2020/21 at +0.8 pct
  • median real gdp forecast for fiscal 2018/19 at +1.6 pct vs +1.4 pct projected in January

Quick headlines via Reuters   


Well, cast your eye over those quick headline takes …  and if you are thinking like me it looks like the BOJ has managed to get itself even more dovish … 

  • downside risks for the economy and inflation

Yeah … check out the bit I put in CAPS ….






Sheesh …. have they given up now?  …. and … Fuggedaboud the talk of exit …

prior to the BOJ announcement there was plenty of data from Japan out earlier:

Japan’s economy is not going along too badly at all. 

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